Navy Secretary Ray Mabus agrees with President-elect Donald Trump that the F-35 joint strike fighter program is too expensive and its price needs to come down. But he is doubtful that any verbal agreements between Trump and industry CEOs will magically fix the program.
The per-aircraft cost of the F-35 is too high now, but should be going down as production ramps up, Mabus told reporters Jan. 11, just days before ending his term as the longest serving Navy secretary in the modern era.
Any assertion that costs would fall miraculously as a result of Trump intervening is not believable, he said. “This may be the easiest promise that anybody has ever made. It was going to happen anyway,” Mabus said of the president-elect’s pledge to bring the price down. “I don’t think that handshake deal has any meaning,” he said in reference to Trump’s overture to the Boeing Co. to “price” a more advanced version of the F/A-18 Super Hornet as a cheaper alternative to the F-35.
Mabus nonetheless said he has been disappointed by the performance of the Lockheed Martin-built F-35 over his eight years in office, and praised his decision to keep buying Super Hornets for the Navy as a bridge until the carrier version of the F-35 completes development in 2019.
“The F-35 is very late, it’s way over budget,” he said. “We’ve bought F-18s the entire time I’ve been secretary.”
The Navy always was scheduled to be the last service to receive the F-35, and there has been speculation for years that Navy leaders never intended to stop buying Super Hornets out of fear that the F-35C would not come to fruition. Mabus said the Navy is comfortable it can handle F-35 delays, unlike the Marine Corps and the Air Force, which have no fallback plan.
“The Marines have no back up. They haven’t bought Super Hornets and the Harriers are very old. They have to have it,” Mabus said of the F-35B, the vertical takeoff version that the Marine Corps is buying to replace the aging Harriers. “They are getting the aircraft that they need.”
The Navy should “always have different generations of aircraft on the carrier decks,” he said. “For that reason we need to have the F-35 coming in behind the F-18. But they need to drive the cost down, and it’s late.” It will fall on the Trump administration to decide whether the Navy’s F-35C will continue on. “As of right now the F-35C will get its first squadron in fiscal year 2019.”
Mabus said it should not surprise anyone that this program has been so problematic. “It’s been a pet cause of mine,” he said, of the ill-fated decision to make the F-35 a tri-service “joint program that is not joint,” he said. “You have three aircraft. It’s not one aircraft that can do three different jobs.” One consequence of that arrangement is that “there is no one held accountable” when problems arise. “If it was a service program, you’d go up to Congress and say, ‘I’m responsible, look at me, look at the CNO [chief of naval operations].’”
Not knowing what specifically Trump might have negotiated with Boeing for an alternative to the F-35, Mabus said prices should be on a downslope regardless. “What I do know is that at this stage in the game the prices ought to be going down. Once you get into production, the price of each aircraft should be cheaper than the one before. There ought to be a learning curve, economic benefits to having production going at full rate.”
Mabus does not believe that publicly shaming companies as Trump did last month in various tweets — bashing both Boeing and Lockheed Martin — is a viable negotiating strategy. “I’m not sure it works,” he said. During his time in office, Mabus said, he helped reduce the cost of Navy destroyers, carriers and submarines by meticulously negotiating with contractors. “We did that with pretty straightforward stuff, shaming wasn’t part of it.” The key is to have stable designs and mature technologies and be upfront with contractors on “what you are going to build,” said Mabus. The industry also has to do its part by investing in infrastructure, hiring and training people, he said. “I think we’ve driven very hard bargains, and I think they’ve been fair.”
Trump again brought up his plan to reduce the cost of the F-35 during opening comments at a news conference Jan. 11. “The F-35 is way, way behind schedule and many billions of dollars behind budget,” he said. He praised Pentagon officials who discussed the issue with him in meetings in late December. “The admirals and generals have been fantastic. We are going to do some big things with the F-35 and perhaps the F-18 programs. We are going to get the costs down. We’re going to have competition. It’s going to be a beautiful thing.”
Industry watchers remain dumbfounded about the idea of replacing the F-35 with an F/A-18 Super Hornet. The Navy and Marine Corps operate F/A-18s, but the Air Force does not. And the program has many international partners who would be affected by any disruptions in the program.
Aerospace industry analysts are scratching their heads. “Unless the rules of physics have changed, you cannot make a non-stealthy two-engine carrier based aircraft from the 1980s into a single engine, multi-role stealthy fighter from the 2000s,” noted Robert Stallard, of Vertical Research Partners.
Air Force Lt. Gen. Chris Bogdan, head of the F-35 joint program office, has said repeatedly that the F-35 has been on budget and on schedule since the Pentagon restructured the program in 2011. He told reporters last month that the low-rate production lot 9 contract marks a 5.5 percent drop in prices for the F-35A Air Force variant, a 1.8 percent decline for F-35Bs and a 2.5 percent rise for F-35Cs, compared to the previous lot. His goal is to reduce the cost from $102 million apiece to less than $85 million per aircraft by 2018.
Lockheed Martin has called on the Defense Department to commit to a long-term agreement, or “block buy” so the company can negotiate better prices with subcontractors. But the Pentagon’s top weapons tester, J. Michael Gilmore, recently cautioned against such agreement.
“The Department should carefully consider whether committing to a ‘block buy’ is prudent given the state of maturity of the program, as well as whether the block buy is consistent with a ‘fly before you buy’ approach to defense acquisition," wrote Gilmore, director of the Defense Department’s operational test and evaluation. He also has recommended Congress conduct a comprehensive review of the F-35 program, Bloomberg News reported. He asked lawmakers to ensure that program officials “adequately fix and verify hundreds of deficiencies” identified in the DOT&E fiscal year 2016 annual report.